I’m not going to focus on the myriad tax cuts for the rich and corporations that are the basis for Mitt Romney’s tax plan. I just want to focus on some basics here. Specifically – we’re going to focus on 2 different tax cuts that Romney has proposed:
If Romney had his way – he would completely eliminate both the estate tax and the alternative minimum tax which was put in place to prevent the rich from avoiding taxes. To eliminate those two taxes would not only be giveaways to the rich … they’re worth $2.5 trillion collectively over 10 years. How will Governor Romney pay for the $2.5 trillion in tax cuts that go mostly to the rich here? If you’re reducing them to zero … there are no deductions to eliminate to pay for them with. He might say other deductions in the tax code … but which? We don’t know.
Romney said at the Presidential debate HERE:
“We agree; we ought to bring the tax rates down, and I do, both for corporations and for individuals. But in order for us not to lose revenue, have the government run out of money, I also lower deductions and credits and exemptions so that we keep taking in the same money when you also account for growth.”
First off – Romney leaves himself some wiggle room as he says “when you also account for growth”. But – he is saying that his plan is revenue neutral and that it will not add to the deficit. So – forgetting ALL of the other tax cuts he has proposed like cutting everyone’s taxes by 20% and other magic mathematical nonsense by shoring it up with deductions that don’t even exist (there aren’t enough of them) … let’s just keep this simple.
If you want to know the other taxes that Romney has proposed – you can read this from the Committee for A Responsible Federal Budget HERE:
1) Abolishing the Estate Tax.
2) Eliminating taxes on capital gains, dividends, and interest for those with income below $200,000 per year.
3) Reducing the corporate tax rate to 25%.
4) Moving to a “territorial system” for taxing corporate income abroad.
5) Reducing all individual tax rates across-the-board by 20%, meaning the top rate would fall from 35 to 28 and the bottom rate from 10 to 8.
6) Eliminating the Alternative Minimum Tax on both the corporate and individual sides.
7) Permanently extending the Research & Experimentation tax credit.
8) Reforming or repealing various credits, exclusions, and deductions – particularly for higher earners – while retaining some provisions for savings, housing, and charitable giving for middle-income Americans.
Factcheck.org: Romney’s Impossible Tax Promise
Regarding the estate tax – you’re already exempt for the first several million dollars you inherit (2.5 or 3 or 5 million depending on what year). The Center on Budget and Policy Priorities explains the costs of repealing the estate tax HERE:
Making permanent the repeal of the estate tax after 2010 — repeatedly proposed by President Bush— would add almost $1.3 trillion to the deficit between fiscal years 2012 and 2021, the first ten years in which the full costs of extending repeal would be reflected in the budget. This cost includes $1 trillion of lost revenues and $277 billion of higher interest payments on the national debt. Each year of repeal would cost slightly more, in today’s terms, than everything the federal government now spends on homeland security, and considerably more than it now spends on education.
In contrast, eliminating the estate tax not only would mean that large amounts of revenue would be lost, but also that tens of millions of other U.S. taxpayers — nearly all of whom are less wealthy than the households who would benefit handsomely from estate-tax repeal — ultimately would have to foot the bill, by being subject to reductions in other government benefits and services on to which they rely or to increases in other taxes, or by bearing the burden of a significantly higher national debt.
Wikipedia has a great graph highlighting the # of people being impacted by the estate tax over the years HERE:
Regarding the repeal of the Alternative Minimum Tax (AMT) – here is who is affected by income per the CBPP HERE:
Like us on Facebook?